Homework on Bitcoin Transactions and UTXO - Questions

Blockchain and Bitcoin 101
#5667
  1. UTXOs are outputs of transactions that wait to become the input. The wallet stores them as your balance to be used in the future txs.
  2. The wallet combines all UTXOs to make it big enough for the transaction to be made (as long as it’s possible according to the balance in the wallet).
  3. A BTC wallet specifies txs fees as the difference between output and input. It also queries the blockchain to see what a reasonably good fee would be. In some cases, the fee can be specified manually.
  4. Output can be a different wallet you own. Also, it is impossible to tell which output is connected to certain input as they can be partial (or as mentioned earlier, can be combined etc.).
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#5668
  1. UTXO are the balance left in your wallet.
  2. The transaction would decline.
  3. Input minus Output.
    4.Make use of different addresses when you want to receive.
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#5669

You can use multiple UTXOs as inputs to a new tx. If that isn’t enough to cover your transaction then your transaction would be refused.

#5670

I don’t get it, what’s single utxo and the multiple utxo, like the difference, and then, are you African maki?

#5671

  1. a UTXO is the balance left after one has made a transactions. It could also be thought of as change. The example of the two five dollar bills said how if something cost seven dollars and one paid with two fives, one would get chance… utxo.

  2. The transaction would be declined because there are insufficient funds to cover the required fees.

  3. It specifies the transaction fee by taking the difference between inputs and out puts.

  4. By creating multiple wallets and using multiple addresses, one could increase security.

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#5672

Let say you have total 6 bitcoin in your wallet. Although you observe just one balance, your funds are actually comprised of several UTXOs. You may have 2 UTXOs worth 3 bitcoin each, So the 3 bitcoin is called the single UTXOs. Let’s assume that you’re shopping a phone that costs 4 bitcoin and you don’t have one valued at precisely 4 bitcoin, It’s impossible to split UTXOs, so there’s no way to pay the exact 4 bitcoin that you owe. Instead, you use multiple UTXOs to cover your costs.

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#5673
  1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXO’s are amounts of Bitcoin stored in your wallet waiting to be spent.

  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?

Transaction would not be valid and would be rejected.

  1. How would a bitcoin wallet specify the transaction fee when creating a transaction? The difference between the input minus the output is the fee. Some wallets allow you to specify a fee.

  2. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

By sending multiple transactions to multiple output wallets.

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#5674

Well understood thanks

#5675

You can use multiple UTXOs as inputs to a new tx. If that isn’t enough to cover your transaction then your transaction would be refused.

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#5676

Unspent Transaction Outputs are the result or balance of previously processed input transactions. This will be calculated by your wallet as the balance that you would again be able to spend as an input.

The transaction will be declined

Input = Output + Tx fee

As far as I believe (at this point) the transaction will never be private. It is open for everyone to see and this is the point of blockchain. You could increase the number of outputs to include a new personal address every time you process a transaction but because your wallet isn’t linked to your identity so I don’t understand why you would need to go though that hassle.
Feedback would be appreciated on this one

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#5677

Homework on Bitcoin Transactions and UTXO - Questions and Answers

  1. Describe what Unspent Transaction Outputs (UTXO) are.
  • This is money / cryptocurrency (inputs) that have been sent to a node and have yet to be spent / send off to another receipient.
  1. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
  • Your wallet would not send out the transaction as it would be seen/verified on the block chain that there is not enough funds aka UTXOs
  1. How would a bitcoin wallet specify the transaction fee when creating a transaction?
  • By simply subtracting the input with the output from a single transaction. Input = Output + Fee
  1. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
  • Transactions contain the addresses of recipients and receivers but these addresses do not have corresponding Personally identifiable Information (PII)
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#5678

1. Describe what Unspent Transaction Outputs (UTXO) are.

UTXOs are outputs linked to your private keys in which you can use as an input. (Basically they are bitcoins that you can use)

2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?

The wallet will construct a transaction by summing the total amount of UTXOs together and dispersing the amount between receiving address, fees and any excess back to your address. If the amount of UTXOs is not sufficient it is invalid.

3. How would a bitcoin wallet specify the transaction fee when creating a transaction?

By how quickly the transaction is to be added to the blockchain.

4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?

When using UTXOs, all addresses are encrypted. Also, all remaining UTXOs must be spent in the one transaction. So when looking at the receiving addresses it is hard to determine who has received what.

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#5679

  1. UTXOs are basically all the input transactions that make up your balance.

  2. You would use multiple UTXOs and send yourself back the change.

  3. It would be implicit in the inputs minus the outputs. They will also show you the fee before you finalize the transaction.

  4. Multiple output addresses obscure where all the coin is going.

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#5680

Answer 1 - UTXOs are the Input for my next transaction
Answer 2 - Transaction will not be created and it will fail
Answer 3 - It checks the UTXOs in my wallet then substract it from Output Transaction to ensure that Transaction fees is covered before creating output transaction and next UTXO to myself. It will make sure that Transaction Fees = Input (UTXO) - Output (Tx)
Answer 4 - Any Input and Output transaction uses Private Key to generate a unique address which is shown in transactions results

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#5681

  1. UTXOs are transactiosn that you have received which are currently possible to spend. Adding up all your UTXOs gives you your wallet balance.

  2. If you don’t have any single UTXO that is large enough to cover your transaction than multiple UTXOs will be used to arrive at the appropriate sum and the rest will be sent back to your wallet.

  3. Some bitcoin wallets give you the possibility to choose or modify your transaction feee, while others will create a transaction fees based on recent fees on the blockchain and calculates a fee that will get your transaction into the blockchain reasonably quickly.

  4. You can use the notion of transaction inputs and outputs to increase privacy in your transaction by increasing the number out outputs for any given input. You essentially send yourself bitcoin, then from that UTXO send it to multiple other wallets that you also control and no-one would know who ons any of the wallets.

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#5682
  1. Describe what Unspent Transaction Outputs (UTXO) are.
    That’s the change that we got from our transaction which will be returned on the blockchain and therefore we will see in our wallet.
  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    You would sum it if you had other UTXO in order to make transaction, if no order UTXO is available, transaction would fail.
  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    Fee = Input - Output
  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    Use multiple wallets
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#5683
  1. UTXOs are incoming transactions that can be spent, it is in a sense your balance.
  2. The sum of multiple UTXOs will be used and the change will be sent back to your wallet.
  3. By checking the difference of the transaction inputs and outputs. Some wallets check previous transactions on the block to find a fee that would get you into the block as fast as possible. Some wallets allow you to modify the fee yourself when making a transaction.
  4. By splitting output transaction into multiple addresses.
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#5684

  1. funds you received from other addresses on the blockchain and you can spend.

  2. the wallet will check what UTXO you have, and if the sum of all of them is not big enough the transaction would be rejected, if the sum large enough, the transaction would get executed.

  3. the wallet checks how much fee other transaction paid to be processed in reasonable time, and suggest similar price
    .

  4. By adding at least one additional address in the output, that you own, that way you will still hold the remainder but with different addresses which will increase anonymity.

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#5685

  1. Describe what Unspent Transaction Outputs (UTXO) are.
    ->These are funds an address has received via a transaction, which have not been spent yet and thus are available to send as an input to a new transaction

  2. What would happen if you don’t have any single UTXO that is large enough to cover for your transaction?
    -> The transaction would be invalid and could not be made. Though as long as the sum of UTXOs in a wallet is larger, the wallet will combine enough of UTXOs as inputs to this transaction and then it could be made.

  3. How would a bitcoin wallet specify the transaction fee when creating a transaction?
    -> by looking at the most recent transactions it would suggest a fee that has a good likelihood for this transaction to be included in the next block.

  4. How could you use the notion of transaction inputs and outputs to increase privacy in your transaction?
    ->you could send to multiple outputs and thereby obfuscate or at least make less obvious what the real spend was

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#5686

  1. They are blocks of money from previous transactions, available to be spent by those who received them. Really, they serve the purpose of taking bank accounts out of the equation.

  2. Then you would use funds from more than one.

  3. It just leaves it out mathematically, and whatever is left out is implied to be the fee.

  4. By sending money back to yourself? However, you said all input MUST be spent as output, so I guess I don’t understand the question…

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